Formosa buys 50,000 tons of naphtha at single digit premiums

02-May-13

Taiwan's Formosa Petrochemical has bought about 50,000 tons of naphtha for H1-June arrival at a premium that was its lowest for this year, as per Reuters. This is the smallest volume of naphtha Formosa has bought for this year's delivery. Its lower demand was a result of it replacing some of its naphtha feedstock with cheaper liquefied petroleum gas and its 2.93 mln tpa cracking complex operating below 100% capacity due to soft petrochemical demand. It was not immediately clear what premium Formosa had paid, but traders estimated levels around US$7/ton to Japan quotes on a cost-and-freight (C&F) basis. This reflects a 61-63% drop in premiums compared to its purchase on March 28 for up to 100,000 tons of naphtha for H1-May arrival at Mailiao.